Latin Manharlal Group, A Successful & Leading Provider of Financial Services for over two decades. It has become synonymous name with Reliability & Trust for their customers pan India with more than 200 channel partners and catering to more than 35000 clientele. Latin Manharlal group has evolved itself from mere Equity Broking business to a full fledged Financial Service Provider through its various group companies.

Thursday, 9 February 2017

RBI Maintains Status Quo as Inflation Risks Rise

India's
central bank has refrained from tinkering with the key lending rates,
opting to wait for more clarity on the uncertain inflation landscape and on how
a radical crackdown on black money is affecting economic growth.

The Reserve
Bank of India's (RBI) Monetary Policy Committee (MPC) kept its benchmark repo
rate (the rate at which banks borrow short-term funds from the central bank)
unchanged at 6.25 per cent, during its third bi-monthly monetary policy review
-the sixth and the final one for the fiscal 2016-17.

The monetary policy announcement marked a key shift
in the central banks’ stance. The MPC decided to change its position from
accommodative to neutral in order to assess the transitory effects of
demonetisation on inflation and output gap (the gap between actual economic
growth and potential economic growth).

The change in stance essentially marks an end to a
period in which the central bank slashed interest rates by a total of 175 bps
from January 2015 to October 2016, starting with previous Governor
RaghuramRajan and continuing under Urjit Patel.

The central bank also lowered its economic growth
forecast for 2016-17 to 6.9 per cent from the 7.1 per cent it had forecast in
its fifth bi-monthly policy in December. Before the demonetisation exercise,
RBI was expecting the economy to grow at 7.6 per cent.

Retail
inflation, the RBI’s benchmark gauge for prices, decelerated to a two-year low
of 3.41 per cent in December, but RBI seems more focused on non-food, non-fuel
inflation. With this move, the RBI hints that it will now keep its eyes on the
inflation target of 4 per cent.

The monetary policy committee further highlighted concerns around the global
policy environment, impact of rising global commodity prices and strengthening
of the dollar among others.

At the same
time, the central bank is expecting a recovery in economic growth in the coming
financial year, albeit its gross value added projections show only a 50-basis
point rise to 7.4 per cent in 2017-18.

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Latin Manharlal Group, A Successful & Leading Provider of Financial Services for over two decades. It has become synonymous name with Reliability & Trust for their customers pan India with more than 200 channel partners and catering to more than 35000 clientele.
Latin Manharlal group has evolved itself from mere Equity Broking business to a full fledged Financial Service Provider through its various group companies.